Indiana House OKs bill to end efficiency program

Indiana's 2-year-old statewide energy efficiency program that helps homeowners and businesses cut their energy use would come to end under a bill approved Wednesday by the Indiana House despite a lawmaker's prediction that killing the program would eventually push electricity rates higher.

The House voted 69-26 to approve the bill, which now returns to the Senate for consideration.

The bill originally would have allowed industries that use 1 megawatt or more of electricity to pull out of the Energizing Indiana program, which is financed through a fee utility customers pay on their monthly electricity bills. But the House amended the legislation to add a measure that effectively would kill the program by prohibiting the Indiana Utility Regulatory Commission from extending or entering into new contracts for the program after Dec. 31, 2014.

The amended bill also would prevent Indiana from requiring utilities to meet energy efficiency goals.

The bill's author, Sen. Jim Merritt, R-Indianapolis, said he's going to take the next few days to review the House's changes before determining whether to ask the Senate to approve it or send the bill to a conference committee to restore its original wording.

Merritt said that in authoring the bill he had studied the program's energy-saving benefits for industries but had not assessed its impact on residential and commercial power users. He said he'll research whether those two categories have benefited from Energizing Indiana's home assessments, low-income home weatherizations and other cost-cutting efforts.

"I'm curious when people say that this is a program that's not working altogether," Merritt said. "I'm going to do my due diligence before I say yea or nay. I'm going to study it and understand exactly what the commercial and residential programs are, and then make a decision."

The program's website says it's saved enough energy in the past two years to power nearly 78,000 Indiana homes.

Energizing Indiana began under Gov. Mitch Daniels through a December 2009 administrative order put into motion by the IURC in conjunction with the state's electric utilities and other entities. The program's goal is achieving a 2-percent annual savings in total electric sales by 2019.

State Rep. Matt Pierce, D-Bloomington, urged the House to reject the bill Wednesday, warning that killing the program would increase the need for new Indiana power plants, the costs of which would eventually push electricity rates higher.

Pierce said the bill's supporters have expressed outrage over the program's more than $1 billion cost that's gone into efforts to help cut power usage and the need for new plants. But he said he hasn't heard them complain about the cost of Duke Energy's $3.2 billion Edwardsport coal-gasification plant that's pushed up rates for Duke's Indiana ratepayers.

"Let's quit catering to the electric utility industry and let's start standing up for the ratepayers for a change," Pierce said. "A vote for this bill is a vote to raise the rates of your ratepayers."

Jodi Perras, director of the Sierra Club's Beyond Coal campaign in Indiana, said that in its first year Energizing Indiana has provided energy-cutting services to about 200,000 Indiana households and businesses. She said an independent auditor found Energizing Indiana is saving 25 times more electricity than the state's utilities were previously doing with their own energy efficiency programs.

"What incentive do the utilities have to run these programs when they're in the business of selling energy? Talk about the fox guarding the henhouse," Perras said. "The benefit of having a contractor do this statewide is that it's statewide marketing, a statewide program and their job is to save energy."

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.